European stocks pull back from six-year high

LONDON (MarketWatch) — European stock markets trimmed losses in afternoon action on Wednesday after better-than-expected U.S. housing data calmed worries about the impact from higher mortgages and bad weather, but most markets still closed in the red with earnings reports and broker action weighing on several shares.

The Stoxx Europe 600 index
SXXP, -1.07%
which closed at a six-year high on Tuesday, fell 0.2% to end at 337.70.

Heavyweight Seadrill Ltd.
SDRL, -0.26%
weighed on the main index with a 0.6% loss after Nomura cut it to neutral from buy. The re-rating came after Tuesday’s results for the offshore driller, which provided a muted outlook for the deepwater-drilling market in 2014 and said there would be limited scope to lift its quarterly dividend.

On the upside, shares of Swiss Life Holding AG
SLHN, -0.96%
jumped 6% after the insurer raised its dividend 22%. It also posted net income for 2013 that beat forecasts of analysts polled by Bloomberg.

More broadly, European stock markets started trimming losses in afternoon action after data from the U.S. showed new-home sales jumped 9.6% in January to a seasonally adjusted annual rate of 468,000, hitting the highest level since July 2008 and beating analyst expectations. Economists had expected unusually cold weather and higher mortgage rates to hit sales of new homes.

In data news in Europe, the Office for National Statistics said U.K. gross domestic product rose 0.7% quarter-on-quarter in the final three months of 2013, unrevised from a preliminary estimate and in line with expectations. Year-on-year, the economy expanded by 1.8%, down from the previously estimated 1.9%.

Investors in London largely ignored the data, with the FTSE 100 index
UKX, -1.69%
staying lower after the report, closing 0.5% lower at 6,799.15.

The German DAX 30 index
DAX, -1.39%
however, tripped 0.4% to 9,661.73, weighed by Lanxess AG
LXS, +0.41%
down 2.7%. The chemicals firm said impairments and restructuring charges drove it to a loss in 2013.

France’s CAC 40 index
PX1, -1.13%
dropped 0.4% to 4,396.91. Shares of LVMH Moët Hennessy Louis Vuitton
MC, -0.61%LVMUY, -0.01%
gave up 1.6% after Credit Suisse cut the luxury-goods firm to underperform from neutral. The analysts said LVMH is likely to underperform its peers in 2014 despite a diversified portfolio of brands with solid market positions and a strong management team.

Outside the major indexes, drug maker Novo Nordisk AS
NVO, +0.00%NOVA, -1.21%
dropped 1.7% pulling back from a record high reached on Tuesday, when J.P. Morgan Cazenove lifted the company to overweight from underweight.

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